Employers can make 'foolish' business decisions

By Agenique Smiley
BridgeTower Media Newswires

 DETROIT — In Payment v. Department of Transportation, the Michigan Court of Appeals confronted the issue of whether a mental illness is a disability as defined under the Michigan Persons with Disabilities Civil Rights Act (PWDCRA). Affirming the holding of the Chippewa Circuit Court, the court held that, with the benefit of medication, the evidence indicated that Mary Payment would no longer be considered disabled under the PWDCRA.

Like a physical disability, a disability based on a mental illness must affect a major life activity; however, an additional level of scrutiny — considering the mitigating effect of medication — is applied to the consideration of a mental illness.

The natural companion question to the question of whether a party is disabled for PWDCRA purposes is whether the employer’s employment decision was based on his or her disability.

As the Court of Appeals discovered in Payment, when the adverse employment decision is based on a disability rooted in a mental illness, the employer has a better opportunity to argue that its decision did not have a prejudicial pretext.

When rejecting Payment’s employment discrimination claim, the Court of Appeals held that employers are permitted to make “foolish or otherwise generally bad business decisions” which do not create a question of fact regarding whether that decision was made on a prejudicial basis.

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‘Payment v. Department of Transportation’

Payment filed suit in the Chippewa Circuit Court against her former employer, the Department of Transportation, alleging violations of the PWDCRA. In her complaint, Payment alleged that she was repeatedly passed over for promotion in favor of less qualified applicants because she suffered from depression and anxiety.

She asserted that — because of her depression and anxiety — she is “disabled” as defined under the PWDCRA and, by basing its employment decision on her debilitating condition, the department was committing discrimination in violation thereof. The circuit court concluded that Payment was not “disabled” under the PWDCRA and the Court of Appeals affirmed its decision.

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‘Disabled — as it actually exists’

According to the Court of Appeals, there is no “serious dispute” and, apparently, nor would it “entertain any” that depression and anxiety “can cause” a person to be disabled for the purpose of the PWDCRA. However, a diagnosis of depression and anxiety, in and of itself, does not categorically translate to a disability.

The PWDCRA defines “disability,” as relevant here, as a determinable mental characteristic of an individual that substantially limits at least one major life activity and is unrelated either to the person’s qualifications for their job or ability to perform their job duties.

One question that the court was called to answer was whether the trial court correctly determined that it must evaluate Payment’s disability status based on her condition as it exists with the benefit of medication.
The panel’s response was twofold. Initially, it stated that “binding case law” required courts to consider the mitigating effects of medication when resolving the question of whether a condition is a disability; thereafter, it concluded that all contradictory arguments must fail. Basically, the law requires the trial court to assess an individual’s condition “as it actually exists.”

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‘Major life activity’

Disability status — and, by extension, protection — under the PWDCRA requires that the claimed disabling condition “affect a major life activity.” Major life activities include caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.

Whether an impairment substantially limits a major life activity is determined in light of the nature and severity of the impairment; its duration or expected duration; and its permanent or expected permanent or long-term effect.

To meet this burden, the Court of Appeals added, Payment was required to submit evidence from which the Chippewa Circuit Court could conclude that her disability caused substantial limitations when compared to the average person. Major life activities that are not occupation-related are examined in light of whether the person can perform the normal activities of daily living.

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‘No longer disabled’

Payment claimed, despite the benefit of medication, that her depression and anxiety still caused her to be disabled within the meaning of the PWDCRA. She alleged that the major life activities suffering substantial limitations were thinking, concentrating, decision-making, remembering details, sleeping, eating, caring for herself, breathing, cardiovascular functioning, and working.

The Court of Appeals agreed that the previous statement, taken alone, would support a finding of disability within the meaning of the PWDCRA. However, Payment also agreed that, with the use of her medication, the symptoms of her depression and anxiety are manageable. Concurring, her treating doctor, although admitting that there is no cure for depression and anxiety, stated that — because of her medication — Payment was “pretty much in remission.”

The panel ultimately found that the evidence indicated that, with the benefit of medication, Payment would no longer be considered disabled for PWDCRA purposes. However, the court did agree that her previous hospitalization and the limitations temporarily ordered by her doctor support a finding that she has a history of being disabled.

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Adverse employment decision

Examining Payment’s employment discrimination claim, the court contended that, even if she were disabled, however, the PWDCRA prohibits various adverse employment actions based on physical or mental disabilities that substantially limit a major life activity of the disabled individual, but that, with or without accommodation, do not prevent the disabled individual from performing the duties of a particular job.

Payment and the department agree that any limitation should be evaluated as of the time of the challenged employment decision, which would include whether she had a history of being disabled or was regarded as being disabled at that time, in addition to whether she was actually disabled at that time.

At the center of Payment’s PWDCRA discrimination claim is her belief that she was penalized by the department for the manner in which it had to accommodate her previous hospitalization and temporary restrictions ordered by her doctor. She contends that one significant result of the department’s penalties is that she was passed over for several promotion opportunities.

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‘Foolish business decisions’

The Court of Appeals acknowledged Payment and the department’s agreement that she and the first person promoted over her were “close.” The court also noted Payment’s belief that the department’s tie-breakers were “ill-considered as to be nonsensical.”

Be that as it may, the panel also found persuasive and agreed with the Seventh Circuit that, as a general matter, employers are permitted to make “foolish, counterproductive, or otherwise generally bad business decisions.” Continuing, the court stated that the doubtful quality of an employer’s business judgment does not create a question of fact as to whether distinct non-discriminatory reason is pre-textual.

Conducting an audit of Payment’s claim, the panel concluded that she has failed to demonstrate a case of discrimination apart from her subjective opposition to the department’s decisions to promote another candidate over her; she merely believes that the department exercised poor judgment in assessing the relative worth of the candidates.

The panel concluded that PWDCRA is not a statute designed to enable judges to second-guess, or to improve upon, the business judgments of employers.